Port faces major issues | Can it meet the challenges?

With U.S. trade projected to double and containerized trade expected to triple by 2020, the Port of Virginia again is approaching a crossroads.

Will it be able to position itself internationally as a port that can handle shippers' demands?

Or will it fail to prove to the industry that it is a world-class operation and lose ground to growing East Coast competitors, including the Port of New York/New Jersey and the Port of Savannah?

Three major issues are likely to factor in the answer.

Local competitionWhen APM Terminals Inc. in 2007 put the finishing touches on a private, $450 million marine terminal in Portsmouth, the company became the first major local competition for the state-owned terminals of the Virginia Port Authority.

APM, a division of the world's largest shipping company, the Danish conglomerate A.P. Moller-Maersk Group, immediately began siphoning business away from the authority's terminals.

As of September, eight international shipping lines call on APM, putting the terminal at about 60 percent capacity, said Ed McCarthy, APM's Virginia senior director. It now directly and indirectly employs about 250 people.

How well the private company and VIT work together to recruit new container business away from other ports instead of compete against each other for existing business will play a major role in total port growth, said Joseph A. Dorto, president and chief executive of the authority's operating arm, Virginia International Terminals.

"If we battle with APM for existing business, then both of us will beat each other up, and the port won't grow," Dorto said.

Largely, McCarthy agreed.

"We are competitors. But at the same time, APM and VIT absolutely have to work together and maintain a good relationship for the betterment of the port."

Craney Island expansionThe most ambitious project ever undertaken by the Port of Hampton Roads is the planned expansion of Craney Island as a marine terminal.

Set to be built on what's now 600 acres of open water on the Elizabeth River, the new terminal eventually will be able to handle up to 4 million additional twenty-foot equivalent containers (TEUs) a year, more than doubling the combined capacity of the three existing state-owned terminals in Newport News, Norfolk and Portsmouth.

At a projected cost of $2.24 billion, the new port development is projected to open in three major phases beginning in 2017.

"To me, this is the star," Dorto says. "Craney Island is the future."

Authority officials believe the additional capacity at Craney is a crucial step the port must make to compete for growing international trade business in the future.

PrivatizationIt's perhaps the largest lingering uncertainty surrounding Virginia's state-owned marine terminals, and one that's finally made its way into legislators' hands.

Privatization of Virginia's ports for years has been an issue that's risen and subsided with the state's economic and political tides.

During the 2008 legislative session, amid a wave of marine terminal operator-rights purchases throughout the U.S., privatization surfaced again. And this time, the issue will at least get a look.

The General Assembly approved forming a 17-member committee to study whether the state would stand to benefit by selling the rights to operate the state-owned terminals to a private company.

The $27,200, two-year study will examine whether a partnership between the authority and a private operator could benefit taxpayers by providing an influx of cash and reducing state spending on port expansion projects.

Any privatization effort in Virginia would be subject to close scrutiny and could take years to complete. Nevertheless, it could have a significant impact on the way the Port of Virginia looks in the future.